Copper Export Permit Newmont Nusa Tenggara Expired, Waiting for Extension
Business activities at Newmont Nusa Tenggara (NNT), one of Indonesia’s largest copper miners, could be disrupted as the subsidiary of US-based mining company Newmont Mining Corp is yet to obtain a recommendation letter (from Indonesia's Energy and Mineral Resources Ministry) to renew its 6-month copper concentrate export permit (which expired on 20 May 2016). The recommendation from the Energy Ministry is needed to obtain the export permit from Indonesia's Trade Ministry.
Bambang Gatot, Director General for Coal and Minerals at the Energy Ministry, said his department is still evaluating the documents related to the extension of Newmont Nusa Tenggara's 6-month export permit. Gatot did not inform whether this evaluation is related to progress regarding NNT's commitment to invest USD $3 million in the development of a USD $2.1 billion copper smelter in Gresik (East Java) in cooperation with other mining giant Freeport Indonesia. Earlier it was reported that Indonesia's Energy and Mineral Resources Ministry issues the recommendation letter for a six-month export permit to specific miners based on progress made with the construction of smelting facilities (Energy Ministry Regulation No. 5/2016).
Gatot added that the expiration of the export permit and the delay in the granting of the recommendation letter to NNT for the extension of the permit will not disturb NNT's business activities because the miner does not export its copper concentrate output every day and therefore a delay of a couple of days will not cause problems. Gatot expects the recommendation letter to be issued somewhere early next week.
In line with the 2009 Mining Law and the ban on exports of unprocessed minerals, Indonesian miners are encouraged to construct smelting facilities in Indonesia. However, as domestic smelting capacity across Southeast Asia's largest economy is still insufficient, while low commodity prices have made it unattractive to invest in costly smelters, the Indonesian government temporarily allows mineral ore exports (through the issuance of six-month export permits) provided these miners pay higher taxes as well as royalties and show evidence of their commitment to establish onshore smelting facilities.
If NNT's request for another 6-month export permit is approved, then it would be the fourth time that NNT's copper export permit is renewed. NNT had filed for the latest extension in late April.
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